Economic Research & Analysis

May 2016 Economic Snapshot

Highlights

Private employment in New York City increased by 4,400 jobs between March and April 2016.The unemployment rate remains at 5.5%, down from 6.9% this same time last year. The number of new residential construction projects increased 28.9% for the 12-months ending April 2016 compared to the previous year. These projects contained 48,000 living units – up 61.6% over the same period the year prior.Subway ridership was 156.3 million in March 2016 – up 2.1% over last year.Attendance at Broadway shows was 1.1 million for April 2016, up 2.8% from the prior year.

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In honor of International Trade Week, our monthly snapshot takes a closer look at how international trade affects New York City's economy.

Employment

Private sector jobs in New York City rose by 4,400 in April 2016 following March 2016 gains of 2,500 jobs.

Government jobs in the city fell by 200, resulting in a net overall increase of 4,100 jobs between April and March 2016.

The Arts, Entertainment, and Recreation and Real Estate sectors experienced the strongest job growth, each adding 1,900 jobs from last month.

Since April 2015, private sector employment has risen by 96,500 jobs, an increase of 2.6%. This compares to the national growth rate of 2.2%.

New York City’s unemployment rate held constant at 5.5%, down from 6.9% in March 2015.

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International Trade

This month, the United States celebrates the 76th annual World Trade Week. World Trade Week brings together business groups, foreign consulates, and government agencies to celebrate international trade.1 NYCEDC is a partner for World Trade Week NYC, and this snapshot will focus on the impact and importance of international trade to New York City’s economy.

The New York metro area leads the nation in exports, and its globally exported goods and services were worth $126.5 billion in 2014, accounting for 9% of that year’s gross metro product.2 Studies have shown that jobs created by exports pay higher wages and are more resilient during economic downturns.3 Furthermore, most of the fastest-growing global markets are located outside the United States, and in the developing world, and firms that serve those countries are more likely to experience accelerated growth.

The character of New York City’s exports has been changing over time. While exports of goods have remained flat since 2003, exports of services have more than doubled.4 Services comprise an increasing percentage of total activity, imitating shifts in the structure of the city’s economy. New York City has done particularly well with exports in creative industries,5 which grew 7.7% annually between 2003 and 2014 (See Figure I).

Export-supported jobs have also been rising rapidly (See Figure II). In 2014, approximately 286,000 New York City jobs were export-related, up from 157,000 in 2003 (an 82% increase). Service industries are more labor intensive than goods and manufacturing, creating more jobs per million dollars in exports.

Foreign Direct Investment (FDI) is another crucial component of international business, and local jobs are created when an international firm opens a branch in New York City. FDI can also expose the local economy to international knowledge flows and new technologies. In Manhattan alone, job creation from FDI has increased 15% annually from 2003-2015.6 Figure III shows where most of this FDI comes from.

Real Estate & Construction

Manhattan Office Market

In April 2016, the Manhattan Class A direct vacancy rate fell one percentage point from one month prior to 8.8%, while the average rental rate held steady at $80.

The most significant change was in the Midtown market, where the vacancy rate fell to 8.4%, from 9.7% in March.

Average rents in Midtown South increased to $83 per square foot from $77 last month, and have risen 7.0% from April 2015, the fastest rate of growth among the Manhattan commercial real estate markets.

Construction

For the twelve months ending March 2016:

The number of building projects (including new, additions, and alterations) that started construction rose by 23.9% while infrastructure (non-building) project starts were down 18.9% from the twelve months ending April 2015.

The total value of construction projects grew by 6.5%, reaching $36 billion for the twelve months ending April 2016 with a corresponding growth of 40.4% in square footage. Residential buildings experienced the strongest growth in square footage since April 2015, at 54%.

Of the 7,800 building projects that began construction, 3,863 were residential projects, representing a 28.9% increase from the twelve months ending April 2015. These starts contained 48,164 units, up 61.6% from the preceding twelve months.

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Source: McGraw-Hil

Transit, Travel, and Tourism

Transit Ridership

Total ridership on MTA subways, trains, and buses in March 2016 was 214.9 million, a 1.9% increase from March 2015.

Subway ridership in March 2016 was 156.3 million, up 2.1% from March 2015.

Source: Metropolitan Transportation Authority

Travel and Tourism

Air Traffic

In February 2016, 8.7 million passengers flew into and out of the region’s airports, representing an increase of 10.5% from February 2015. These airports hosted 125.6 million passengers over the 12 months ending in February.

Domestic air carriers account for 66.9% of these flights, with 5.8 million passengers.

The region’s airports transported a total of 149,985 tons of freight in February 2016, down 4.7% from the prior month. Of this freight, 66% of was from international flights.

Source: Port Authority of New York and New Jersey

Broadway Ticket Sales

TotalBroadway attendance was 1,125,792 over the four weeks ending May 15, 2016, on par with the prior four weeks and up 2.8% for the same time in 2015.

Ticket sale revenues over these four weeks rose 0.7% from the same time last year, reaching $109.3 million.

Source: The Broadway LeagueNote: Gross revenue and attendance figures may not include all shows

Hotel Occupancy

In February 2016, the average daily hotel room rate was $203, an 8.5% fall from February 2015.

Hotel occupancy was 77.7% in February, on par with last year.

The average daily hotel room rate decreased the most in hotels charging less than $245 per night.